New York investigators probing possible wrongdoing in the college loan industry are exploring whether USC’s financial aid director had improper business ties to a lender that her office has recommended to students.

A letter sent Wednesday by the office of New York state Atty. Gen. Andrew M. Cuomo to the university said it was looking into whether Catherine Thomas, a USC associate dean and financial aid director, “engaged in deceptive practices or other illegal conduct in connection with her dealings with Student Loan Xpress Inc.”

According to New York officials, authorities are reviewing whether Thomas improperly received 1,500 shares of stock in Educational Lending Group, the former parent company of Student Loan Xpress.

The letter from Cuomo’s office stated that New York officials “are deeply concerned” that Thomas may have received the shares in exchange for placing Student Loan Xpress on the university’s preferred lender lists or to influence her to place the company on the lists.

“Students may therefore have been left with the false impression that the company was preferred because it was best for students, when in reality the company was selected because of its stock grants to Ms. Thomas,” the letter said.

James Grant, a USC spokesman, said the university has not taken any disciplinary action against Thomas after receiving the letter by fax and that the 15-year university employee, a longtime college financial aid specialist, was at work Wednesday. He declined to comment beyond offering a prepared statement that said, “We have just received a copy of the attorney general’s letter and will now review the information in the letter and respond.”

The letter to USC asked the university to arrange to provide documents related to the New York investigation and to determine whether “any other financial aid officers received any payments, stock or other benefits from any other lending institutions.” It also asked USC to provide documents showing how the university selected its preferred lenders over the last six years.

No wonder the Financial Aid office hasn’t been returning my emails. Glad I checked the lenders out myself!